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Avnet confirmed as Horizon suitor

by Stuart Wilson, Friday 18 April 2008

Distribution giant Avnet plans to snap up Horizon Technology Group for €101.3m (US$159m) cash. The offer, which works out at €1.18 per share, represents a massive 153.8% premium on Horizon shares closing price of €0.465 the day before the offer was acknowledged. Horizon’s directors are unanimously recommending that shareholders accept the Avnet offer, which values Horizon at a price-earnings ratio of 17.2 based on full year 2007 after tax profits.

Roy Vallee, chairman and CEO at Avnet, said: “The acquisition of Horizon will strengthen Avnet Technology Solutions’ position in the UK IT distribution market and expand its geographic coverage into Ireland. Horizon’s position with tier 1 vendors and growing services practice offers an opportunity to bolster Avnet’s current product and services offerings in Europe.”

“This acquisition creates exciting cross selling opportunities and adds scale to our Avnet Technology Solutions business in the region. We are also excited about the management and talented team of people at Horizon that will allow Avnet to accelerate the growth of Avnet Technology Solutions in Europe,” he added.

Samir Naji, chairman of Horizon, commented: “We are delighted to announce this transaction which is being unanimously recommended by the Horizon board. The offer represents a substantial premium for Horizon’s shareholders and, as an all cash offer, provides certainty of value in highly uncertain markets. The value ascribed to this offer recognises the intrinsic value and strength of Horizon’s business, which has been built through the commitment of a dedicated team over many years.”

Horizon, which operates in the UK and Ireland, works with a number of major vendors including Sun Microsystems, Juniper, F5, Nortel, Tandberg, EMC and Oracle. In the United Kingdom, Horizon focuses on the provision of enterprise infrastructure and services. It assists customers, usually via a system integrator, in implementing IT strategies through the provision of IT infrastructure, development and consulting services.

In Ireland, Horizon operates in the enterprise solutions market and assists customers in implementing IT strategies through the provision of IT infrastructure, applications software development, implementation consulting and support services. For the fiscal year ended 31 December 2007, Horizon generated revenue of €288 million. Horizon is a public company listed on the Irish and London Stock Exchanges since 1999.

New York quoted Avnet Group is one of the largest distributors of electronic components, computer products and technology services and solutions with more than 300 locations serving more than 70 countries worldwide. For the fiscal year ended 30 June 2007, Avnet sales hit US$15.7 billion. Avnet’s offer for Horizon will require EU merger clearance.

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